Kiwisaver projected to reach $60b by 2021 - English
KiwiSaver funds are projected to grow to $25 billion by 2015 and $60b by 2021, taking into account the changes to the scheme that will be introduced in next week's budget.
KiwiSaver funds are projected to grow to $25 billion by 2015 and $60b by 2021, taking into account the changes to the scheme that will be introduced in next week's budget.
Finance Minister Bill English gave the figures to Parliament today, saying KiwiSaver was going to be an important retirement income supplement to national superannuation.
Prime Minister John Key yesterday announced KiwiSaver and Working for Families would be trimmed in the budget because they were costing too much and weren't sustainable in tough economic times.
He didn't give details of the changes but said the KiwiSaver tax credit, worth about $20 a month, would be reduced and replaced with higher contributions from members and employers.
The $1000 kickstart for new account holders won't change.
Working for Families would be more strongly focused on lower-income families and there would be "a little less" for those higher up the scale.
Mr English told Parliament today that so far, just over half of all KiwiSaver balances had been contributed by the Government.
"The Government is, in effect, borrowing from abroad to make those contributions," Mr English said.
"As the prime minister has said, borrowing from one bank to deposit in another is not saving."
Labour's finance spokesman, David Cunliffe, asked Mr English whether he accepted that the proposed changes would amount to a $10 a week tax increase for 1.7 million KiwiSavers.
Mr English said the Government had made decisions that reflected the circumstances it found itself in.
"That is, with a record $16b to $17b deficit, which has been the price of supporting this economy through the recession and facing the costs of rebuilding Christchurch," he said.
"Taken as a whole, the changes to KiwiSaver and the reductions in the deficit will put the whole New Zealand economy on a stronger footing without affecting people's retirement savings significantly."
NZPA
Thu, 12 May 2011
Thu, 12 May 2011
© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
Kiwisaver projected to reach $60b by 2021 - English
14525